Classify the cash flow for each into one of the following activities. Operating, Investing, or Financing. 1.

Classify the cash flow for each into one of the following activities. Operating, Investing, or Financing.

 

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1. 2. 3. 4. 5. 6. 7. 8. 9. Sold common stock for $50,000 cash. Purchased on credit $6,000 of inventory (shirts) from a Hawaiian shirt manufacturer. Paid $15,000 cash to rent a store front in Downtown State College. Rent was paid on the first day of the fiscal year, and the rental period was established as being the entire year (i.e., the same time period covered by the first fiscal year). Hint: as you record this transaction, we are expecting you to think about the net effect of BOTH this initial transaction AND any associated adjustment for the use of the store front during the fiscal year. Your resulting entry should reflect only the net effect. Paid $5,000 for insurance. Insurance was paid on the first day of the fiscal year, and the insurance period was established as being the entire year (i.e., the same time period covered by the first fiscal year). Hint: as you record this transaction, we are expecting you to think about the net effect of BOTH this initial transaction AND any associated adjustment for the use of the insurance policy during the fiscal year. Your resulting entry should reflect only the net effect. Sold all of the Hawaiian shirts purchased in #2 above for a total of $36,000 cash. Paid the Hawaiian shirt manufacturer for the shirts purchased in Event #2 above. Mr. Scott, the owner of the business, took a trip to Italy to learn how to make pasta. The trip cost $7,000, which included the cost of the Italian cooking school. Paid $4,000 cash for miscellaneous expenses. Paid a $10,000 cash dividend to common shareholders of the business. 1. 2. 3. 4. 5. 6. 7. 8. 9. Sold common stock for $50,000 cash. Purchased on credit $6,000 of inventory (shirts) from a Hawaiian shirt manufacturer. Paid $15,000 cash to rent a store front in Downtown State College. Rent was paid on the first day of the fiscal year, and the rental period was established as being the entire year (i.e., the same time period covered by the first fiscal year). Hint: as you record this transaction, we are expecting you to think about the net effect of BOTH this initial transaction AND any associated adjustment for the use of the store front during the fiscal year. Your resulting entry should reflect only the net effect. Paid $5,000 for insurance. Insurance was paid on the first day of the fiscal year, and the insurance period was established as being the entire year (i.e., the same time period covered by the first fiscal year). Hint: as you record this transaction, we are expecting you to think about the net effect of BOTH this initial transaction AND any associated adjustment for the use of the insurance policy during the fiscal year. Your resulting entry should reflect only the net effect. Sold all of the Hawaiian shirts purchased in #2 above for a total of $36,000 cash. Paid the Hawaiian shirt manufacturer for the shirts purchased in Event #2 above. Mr. Scott, the owner of the business, took a trip to Italy to learn how to make pasta. The trip cost $7,000, which included the cost of the Italian cooking school. Paid $4,000 cash for miscellaneous expenses. Paid a $10,000 cash dividend to common shareholders of the business.

Answer rating: 100% (QA)

Lets break down the cash flow for each event 1 Sold common stock for 50000 cash Financing activity I... View the full answer